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Originally published Sunday, November 16, 2008 at 12:00 AM

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Air, cruise and hotel prices tumble

Amid the economic downturn, more people are holding back on travel spending, driving airlines, hotels, resorts and cruise companies to cut deals and drop prices.

Los Angeles Times

With the economy in distress, there might be no cheaper time to travel than this winter, as a sharp drop in demand forces airlines, hotels and cruise companies to slash fares, cut rates and lower fees.

In what might be a silver lining during a season of economic angst, travelers are finding some of the best deals in recent memory, from half-priced resorts to rock-bottom airfares.

"These are glorious times for travelers who have a job and the money," said Chris McGinnis, a travel consultant.

Some off-peak, round-trip tickets from the West Coast to Honolulu have been selling for under $300 in recent weeks. Such fares were around $800 in summer. So few seem to be traveling this winter that Walt Disney World in Orlando, Fla., has been offering three free hotel nights and three days of theme park admission for booking a four-day stay. Some resorts in Mexico have slashed hotel rates by half or thrown in free meals.

It's not unusual for holiday fares to be on sale at this time of the year, and travel is still expensive during peak times, right around Thanksgiving and Christmas.

But with job losses escalating and job security increasingly uncertain, more people are holding back their travel spending, leaving airlines, hotels and resorts with even fewer customers and facing the prospect of another financial crisis. Many families — if they are traveling — are taking either Thanksgiving or Christmas vacations, but not both.

For airlines, the drop in oil prices is bringing down fuel expenses, but that might not be enough if the economy continues to slide. Skyrocketing oil prices in the first half of this year pushed several smaller airlines to file for bankruptcy protection or go out of business all together.

This time, it could be a sharp drop in passengers that grounds some airlines. "It's very bad," said Joe Brancatelli, a business travel consultant who runs the Web site Joesentme.com. "I don't see anyone saying that the economy is going to be good next year, and if the economy isn't good, airlines aren't going to have profitable passengers."

American Airlines, the world's largest carrier, said last week that 745,000 fewer passengers boarded its planes in October compared with the same month last year.

Cruises get cheaper

It's not just airfares. Many cruises, hotels and vacation packages are cheaper than they've been in years.

"It looks like for January and February, we're seeing the lowest cruise fares since post-Sept. 11," said Mike Driscoll, editor of the industry newsletter Cruise Week.

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Since August, he said, prices for cruises in the Caribbean, Mexico and other winter destinations have fallen 8 to 10 percent on average. On some ships, travelers have been able to sail for less than $50 per person per day.

Many cruise lines have waived or reduced deposits or relaxed cancellation deadlines.

Luxury Crystal Cruises, which typically charges $250 or more per person per day, has been throwing in free airfare for some Panama Canal sailings.

Vacationing in Hawaii, always a pricey destination, has become cheaper. You can buy multiday trips for less than $1,000, including airfare.

Even the rich can pinch pennies. The Four Seasons Resort Hawaii, Hualalai, on the Big Island, has been offering a fourth night free. So instead of paying $725 a night for an ocean-view room, guests average $544. If they spring for an even fancier room, they'll get two rounds of golf and two spa treatments.

At the other end of the spectrum, there's Las Vegas, hard hit by the travel downturn. One hotel in the gambling destination recently offered rooms for $1 a night.

For air travelers, planes still figure to be crowded because airlines have been cutting flights to slash costs and keep fares high. But empty seats are starting to crop up, and that's alarming carriers.

To fill planes, airlines are going to have to clip fares, analysts said. "From now until March 15, there could be some really unprecedented bargains," Brancatelli said.

Add less crowded airports and fewer delays, and this winter could turn out to be a "golden age for travel," McGinnis said. With fewer flights, more planes are getting to their destinations on time, according to the site Flightstats.com, which tracks airline performance.

Farecast.live.com, a travel Web site that tries to predict the direction of airfares, said travelers who wait are finding better deals. A recent check of airfares found that plane tickets for the Thanksgiving and Christmas holidays had fallen below last year's levels.

"This is a dramatic change from August and September, when fares were more than 30 percent above last year," said Nick Leahy, a spokesman for the Web site.

Europe travel cheaper

Looking to travel overseas? Europe is more affordable these days, considering that with lower fares and a stronger dollar, it's about 25 percent cheaper to take a vacation there this winter than last year, said Simon Talling-Smith, an executive vice president with British Airways.

"It's a difficult time for us," Talling-Smith said, "but a good time for those who can travel."

Copyright © 2008 The Seattle Times Company

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